If you intend to start a small business in the UK and want to import goods to the country then you should make sure you pay proper customs vat on imported goods so your costs satisfy your predictions. You can surely ensure improved profit margins when your purchase and sale price are in tune with all your calculations.
The hm revenue and customs department or hmrc vat department handles duties on imported goods and services into the UK, and in addition handles vat returns filed by vat registered traders in the united kingdom. As soon as your taxable sales cross 70,000 pounds in Twelve months you might need to get vat registration. Thus will allow you to obtain a vat number and generate a vat invoice for every sale made in the regional market. You will now ought to file a vat return in the designated period and pay vat in line with the current vat rate based on the sales.
However, before you begin selling your services or goods, you might need to import them to the UK. Your goods will most probably fall into one of the 14,000 hm customs vat classifications and you will need to pay the suitable duties on those goods. In the event you want to import tobacco or alcohol products then you’ll have to pay excise duties on the same. It is thus extremely important to be sure of the correct classification of your goods so that you end up paying the exact amount of duties specified on it instead of paying more and boosting your costs or paying less and having into trouble at a later date.
After you have paid all of the relevant import vat, or customs, or excise duties then you will also need to charge the right vat rates while selling those goods locally. Your merchandise might attract the conventional vat rate of 17.5% or perhaps a lower rate of 5% or maybe be vat exempt based on its classification. This rate will definitely vary in other EU countries and therefore you ought to have up-to-date knowledge on uk vat and eu vat rates while importing or exporting your goods as well as selling them locally.
Since it may be very difficult that you keep updating your knowledge on changes happening in customs and vat rates, you should appoint a good customs and vat agent to handle your import and sales duties. Your agent would take care of all paperwork in connection with customs duties, check on whether your products are classified correctly, calculate all vat figures plus file your vat returns in time. Your agent would also be able to help you in vat registration and offer other vat services if your business has just been established.
If you plan to import goods into the UK or maybe in another EU country then a detailed knowledge on all vat rules, customs and excise duties, and procedures on vat returns is vital for healthy business growth. One mistake you could end up earning the wrath of the customs and excise vat department and put a spanner on future vat refunds. While importing goods to your country you should certainly make sure you pay proper customs vat on imported goods in order to retain complete control over your costs.